An employment contract is the foundation of the relationship between an employer and employee. It sets out the main terms that both sides have agreed. However, some terms are implied, such as the duty of trust and confidence, and in certain situations, terms found in other documents can also become part of the contract. This is the case even if those documents are not described as contractual. This often happens with workplace policies and, more occasionally, with collective agreements agreed between employers and trade unions.
Collective agreements
Normally, collective agreements are intended to govern the relationship between the employer and the union. They’re not binding for individual employees. However, a recent Court of Appeal decision, in MN v NHS Foundation Trust L, shows that this is not always the case.
MN v NHS Foundation Trust L
In MN -v- NHS Foundation Trust L, a consultant doctor became subject to a serious disciplinary investigation.
The NHS Trust had agreed to follow a collective agreement called Maintaining High Professional Standards in the NHS (MHPS), which set out how concerns about doctors’ conduct and performance should be handled.
The doctor’s employment contract stated that disciplinary and capability issues would be dealt with using procedures “consistent” with MHPS.
An appendix to MHPS said that the Medical Director would act as the case manager in cases involving consultants, although the role could be delegated to a senior manager in other types of case.
Instead of acting as case manager himself, the Medical Director appointed a senior manager to the role. The Trust argued that this part of MHPS was not part of the doctor’s contract. The doctor disagreed and asked the High Court to require the Medical Director to carry out the role personally.
The Court agreed with the doctor. It found that this provision of the collective agreement had been incorporated into the employment contract and was therefore legally binding.
Look beyond the employment contract
The Court confirmed that terms from collective agreements can become contractual where they are suitable for incorporation.
Key factors include:
- how important the term is to the working relationship
- how clear and precise it is
- whether it works in practice
- the context in which it applies
In this case, the obligation on the Medical Director was clear, workable and significant – especially given the serious consequences disciplinary investigations can have for a doctor’s career and reputation.
This case is a reminder that contractual obligations may not be found only in the employment contract. Employers should also consider collective agreements and related procedures they have committed to follow. In some circumstances, those terms may become legally enforceable – even if they weren’t intended to be contractual.
Further reading
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